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Don't forget the gravy

Brantford City Council considered a referendum on raising taxes and fees. This week's Market Squared considers what's the point of asking a rhetorical question
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How do you feel about paying more taxes?

If you said anything except some variation of “not great”, I would be very surprised. Whether you’re a staunch free-market, small government conservative, or a mellow tree-hugging, hippie-dippie liberal, I think we all agree that no one wants to pay more in taxes.

But the struggle is real. Like in a lot of cases, I’m reminded of an episode of The Simpsons. In “The PTA Disbands”, a teachers’ strike closes the school, and Principal Skinner and Mrs Krabappel try to make their case.

Krabappel tells a public meeting that all the teachers want is a small cost of living increase and money for more supplies. There’s a general murmur of agreement until Skinner gets up and counters that this would mean a tax increase, and the reaction turns negative. One person is heard saying above the roar, “They’re already too high as it is!”

But as my friend and former radio co-host Oliver Rockside says, taxes are the “price of admission” here in Canada. To be part of a grand society, we must all help pay the way. In the end, even the biggest, burliest, most dedicated libertarian in the Ron Swanson mould cannot do it alone.

But now there’s this. Up the road in Brantford a couple of weeks ago, city council there voted on a proposal to add two referendum questions to the 2018 municipal election ballot: “Are you in favour of a zero percent budget increase that includes the impact of assessment growth for 2019, 2020, 2021 and 2022?” and “Are you in favour of no new user fees for 2019, 2020, 2021 and 2022?”

Now the immediate reaction, I think, is what’s the harm? More democracy should always be a good thing, right? I have a feeling though that, in this case, a referendum on these questions is about as useful as a referendum that asks, “Do you like chocolate cake?”

The reaction of Brantford’s city council meanwhile was to vote down the proposal 3 to 6, including a no vote from Mayor Chris Friel. Two councillors were absent from that meeting, so it might have been a closer vote, but still one that would have been lost just the same.

“This is long-term thinking,” said Dan McCreary, one of the three councillors that voted in favour, to the Brantford Expositor. “We're addicted to taxing and spending and we need to draw a line. This will force us to look at our priorities.”

“This feels like an election year resolution doesn't it,” countered Councillor Brian Van Tilborg, one of the no votes. “We all want zero but then we get pressured by people not to cut services.”

There’s the rub. In so much as people think the problem is tax and spend bureaucrats, the first problem is really inflation. The cost of things only ever goes up, so if you’re aiming for a zero increase in the budget, that means not only not spending new money, it means cutting back on some of that old money.

This is where things have always been problematic in any debate about budgeting, and for those that lean into the “we’re taxed too much” direction, the answer is always that government is so wasteful that millions of dollars can be saved just by cutting the gravy. Sound familiar? It should.

In 2011, the City of Toronto did a wide-ranging service review with KPMG, which returned to Toronto council with a list of $100 million in cuts, and they truly were cuts. Recommendations included the elimination of after hours transit service, the closure of libraries and museums, no new money for affordable housing unless it came from the federal or provincial governments, privatizing childcare, and closing the zoos and selling off the animals.

Now it’s hard to consider those kind of deep cuts, even though these are the tough decisions that people in government are supposed to be asked to make. The problem is that the man at the top ran on the idea that these types of decisions would never have to be made.

In 2010, Rob Ford ran on the idea that he was going to “stop the gravy train,” but closing the zoo wasn’t the “gravy” people were thinking of. Indeed Ford’s definition of “gravy” of wasteful spending was overspending, padded office budgets, and extravagant expense reports. In essence, Ford was proposing that the quality and nature of city services wouldn’t change, like the idea that you can lose weight just by cutting bread or sweets out your diet.

Most healthcare professionals will tell you though that it’s not the cutting you need to focus on, but moderation. Are you eating too much bread? Are you not eating enough vegetables? Are you not exercising enough? Are you sleeping enough? Creating good health requires many little actions, and not just one or two big actions. It’s why diets so often fail, and why the results of dieting are so often undone.

That’s all a roundabout way of saying we’re focused again on the wrong thing. Getting hung up on property taxes is a debate that absolves higher levels of government, who have downloaded so readily on municipalities over the last 20 years, from addressing how they’ve made municipalities overly dependant on property taxes for funding.

And in an age where we don’t know what the news is going to bring us, can anyone that thinks this referendum was the basis of good policy say with absolute metaphysical certainty that despite their objections, an urgent need won’t occur that would require the City of Brantford to raise taxes? Who knows what tomorrow will bring in Trump adjusted terms?

Speaking of our friends south of the border, we’ve seen the results of the thought experiment that taxes are universally bad. Grover Norquist’s political pledge to never raise taxes for any reason ever, and the fact you can’t be a Republican politician without signing it, has created a generation of legislators that won’t even consider the idea of raising taxes on anybody.

Of course, they’ve run into the same problem too. In the midst of cutting taxes lately, no serious cut in spending has been passed at the same time, which is only going to force the issue later on and create a political debate that will likely be more bitter than anything we’ve seen yet from this already tense situation.

In Canada, we’re supposed to know better. Grumble though we might about taxes, I think our primary expectation is that our tax money be well spent. Or maybe you think we shouldn’t spend so much money on public art, at least that’s debatable.

We’ve got an election coming, and a lot of people are going to be promising to not raise your taxes, but that’s only ever half a conversation. Spending decisions are not just about how much to spend, they’re also about deciding what not to spend on, and that’s always the hardest part.